Intellectual Property &
Technology Law Journal
Edited by the Technology and Proprietary Rights Group of Weil, Gotshal & Manges LLP
VOLUME 20 • NUMBER 9 • SEPTEMBER 2008
Federal Circuit Hears Arguments on Revival
of “Unintentionally” Abandoned Applications
By William P. Atkins and Thomas Broughan
he US Court of Appeals for the Federal Circuit
recently heard oral arguments about the appropriate
revival standard for abandoned US patent applications.
The ensuing decision may implicate the validity of many
US patents revived as “unintentionally” abandoned during prosecution. The appeal is from a Northern District
of California court, which held that the Patent Act
requires the US Patent & Trademark Office (PTO) to
apply the far stricter “unavoidable” standard when reviving certain abandoned applications. The Federal Circuit’s
decision could have far-reaching consequences, and
companies may want to consider the decision’s potential
impact on their patent portfolios.
T
Aristocrat’s application remained abandoned until
Aristocrat sent the PTO a petition for revival using the
“unintentional” standard on July 18, 2002. The PTO
granted Aristocrat’s petition, revived the application,
and the patent issued.
Aristocrat sued International Game Technology
(IGT) for infringement of the US patent. As a defense,
IGT argues that the patent application was improperly
revived, and thus the patent is invalid and unenforceable. The Northern District of California agreed with
IGT and granted IGT summary judgment in Aristocrat
Techs. Austl. Pty Ltd. v. Int’l Game Tech.1 Aristocrat
appealed.
Background
Aristocrat Technologies Australia Pty Limited
(Aristocrat) sells electronic poker machines. Aristocrat
filed an international patent application in Australia
under the Patent Cooperation Treaty (PCT). The PCT
application was published on January 21, 1999, which
made a US fee due to the PTO by January 10, 2000.
The PTO received Aristocrat’s filing fee on January 11,
2000. The PTO mailed a notice of abandonment to
Aristocrat’s attorney on June 13, 2000.
The Disputed Legal Issues
The Patent Act gives the PTO authority to revive
abandoned applications in certain situations. The
Patent Act contains two different standards for reviving an abandoned application: “unintentional” and
“unavoidable.” The unintentional standard requires
only a declaration by the applicant that the delay was
unintended and is easier to satisfy than the unavoidable standard. For years, PTO rule 1.137(b) allowed
revival as long as an applicant could meet the unintentional standard, and the PTO has issued many patents
on applications that were revived from unintentional
abandonment. However, the district court in this case
found that, although some sections of the Patent Act
allow revival of abandoned applications on a showing
of an unintentional delay, other sections permit revival
only when the applicant can show that the delay was
unavoidable.
William P. Atkins, a partner in the Northern Virginia office
of Pillsbury Winthrop Shaw Pittman LLP, focuses on intellectual
property and related areas in trial and appellate courts, the
International Trade Commission, arbitrations, mediations, and before
the US Patent and Trademark Office. He can be reached at william.
atkins@pillsburylaw.com. Thomas Broughan is a summer associate
with the firm.
This case presents a potential inconsistency between
the PTO’s policy of granting revival for unintentionally abandoned applications and the text of the Patent
Act.
The issue in Aristocrat is whether the Patent Act
clearly indicates when the PTO may revive an unintentionally abandoned application and when the PTO
must apply only the higher unavoidable standard. For
example, 35 U.S.C. § 133 of the Patent Act states that,
“[u]pon failure of the applicant to prosecute the application within six months after any [office action], the
application shall be regarded as abandoned . . ., unless
[the applicant can show that the] delay was unavoidable.” The
fee provision for revival, 35 U.S.C. § 41, however, states
that the PTO shall charge a fee of $1,500:
[1)] for the revival of an unintentionally
abandoned application for a patent, [2)] for the
unintentionally delayed payment of the fee for
issuing each patent, or [3)] for an unintentionally
delayed response by the patent owner in any
reexamination proceeding, . . . unless the petition
is filed under section 133 or 151 of this title, in
which case the fee shall be $500.
Thus with regards to § 133 it is arguably unclear
whether the PTO may apply the unintentional standard
mentioned in § 41 or whether it must apply the unavoidable standard according to § 133.
Similar ambiguities arguably exist in three other sections of the Patent Act. 35 U.S.C. § 151 states that an
allowed application shall be abandoned if the issue fee
is unpaid. Section 151 further provides that, “[i]f any
payment required by this section is not timely made, but
is submitted with the fee for delayed payment and the
delay . . . is shown to have been unavoidable,” the application may be revived. Likewise, for international applications filed under the PCT, 35 U.S.C. § 371 provides that
an application shall be abandoned for “failure to comply with these requirements . . . unless it be shown . . .
that such failure to comply was unavoidable.”
Finally, 35 U.S.C. § 111 states that an application
shall be abandoned for failure to submit the fee and
oath unless the delay was “unavoidable or unintentional.” Unlike the other sections, § 111 explicitly
permits re-vival for either unintentional or unavoidable delay. In light of this, the district court found
that the Patent Act required an applicant to meet the
higher unavoidable standard instead of the unintentional standard to revive an abandoned application
under §§ 133 and 371. If the Federal Circuit upholds
the district court’s decision, these ambiguities in the
2 Intellectual Property & Technology Law Journal
statute could raise questions about the validity of
many issued patents. According to the PTO’s amicus
brief, the PTO has revived approximately 73,000
unintentionally abandoned patent applications over
the past 25 years, and about 56 percent have issued
as patents.
When contacted on June 4, 2008, the PTO stated
that the rule committee was aware of and had discussed
this case, but it has not changed its policy of granting revival petitions for unintentionally abandoned
applications.
The Northern District
of California Decision
The Northern District of California held that proof
of unintentional delay is insufficient to revive an application abandoned under §§ 133 and 371. It found
that the language of §§ 133 and 371 proscribes “unavoidable” as the only standard for reviving a patent. It
rejected Aristocrat’s arguments that the fee provisions
in § 41 implicitly add an unintentional standard to
§ 133. The court found that the statutory and legislative
history undermined Aristocrat’s argument because, for
example, after Congress enacted § 41, it added revival
for unavoidable delay to § 371 but not for unintentional
delay.
The district court also rejected Aristocrat’s claim
that “improper revival” is not a defense to infringement under the Patent Act. It found that failure to
comply with §§ 133 and 371 is an available invalidity defense under 35 U.S.C. § 282, which allows as a
defense to infringement “[a]ny other fact or act made a
defense by this title.” Ultimately the district court found
Aristocrat’s patent invalid due to improper revival and
granted summary judgment.
The Parties’ Appellate
Brief Arguments
Both sides argue that the plain language of the Patent
Act and its statutory and legislative history support their
claims. The parties’ dispute revolves around three main
issues.
The first issue is whether improper revival is a valid
defense to patent infringement. Arguments focus on
the infringement defenses listed in 35 U.S.C. § 282,
specifically over subsection (4), which provides that
“[a]ny other fact or act made a defense by this title”
shall be a defense to infringement. Aristocrat argues for
a narrow construction of this catch-all provision, while
IGT argues for a broad reading. The parties also argue
over whether compliance with the filing deadline is a
substantive condition for patentability.
Volume 20 • Number 9 • September 2008
The second issue is whether the PCT gives the PTO
authority to accept unintentionally late filing fees for
international applications. Aristocrat argues that § 371
incorporates the PCT by reference and that 35 U.S.C.
§ 372(a) requires the PTO to give international applicants the same benefits as domestic ones. IGT argues
that the language of § 371 clearly requires applicants to
show unavoidable delay, and the PCT permits but does
not require countries to allow revival for unintentional
delay. IGT notes that international applicants have
more time to file the fee and Congress has declined to
add “unintentional” to the language of § 371 despite
adding it to § 111.
The third issue is whether the fee section, § 41, alone
gives the PTO the authority to revive unintentionally
abandoned patents. IGT argues that the district court
correctly found that the plain language of §§ 133 and
371 authorizes revival only for unavoidable delay. It
claims that § 41 is a fee provision that does not purport
to modify or repeal the standards laid out in §§ 133 and
151, and as such, § 41 does not provide an independent
basis for the PTO to authorize revival of unintentionally abandoned applications.
Aristocrat argues that if § 41 did not authorize revival of applications that meet the unintentional standard, the standard would have remained useless until
Congress explicitly added the word “unintentional” to
§ 111 12 years later. Aristocrat claims that the legislative history of § 41(a)(7) shows that Congress intended
to establish two revival standards: a high-fee option for
unintentionally abandoned applications and a lower-fee
alternative for certain applications satisfying the more
restrictive unavoidable standard. The PTO’s amicus brief
supports this analysis.
Federal Circuit Oral Argument
The parties and the PTO made their oral arguments
to Judges Newman (presiding), Bryson, and Linn. The
parties and the panel focused their arguments and questions on whether § 41(a)(7) independently gives the
PTO authority to use the unintentional standard in this
case. The panel also focused questioning on an issue
mentioned, but not extensively analyzed, in the briefs;
one that has become increasingly important in light of
the upcoming GlaxoSmithKline v. Dudas2 appeal. That
questioning was about the type of rule-making authority that Congress provides to the PTO.
Aristocrat based its theme on § 41(a)(7): “You cannot
charge a fee for what you cannot do.” When Congress
enacted § 41, the only reference to the unintentional
standard in title 35 appeared in subsection (a)(7).
Aristocrat argued that, unless Congress intended both
Volume 20 • Number 9 • September 2008
the section and the standard to be useless, Congress
implicitly authorized the PTO to apply an unintentional standard to revival. Aristocrat also argued that the
PTO can be, and in this case is, entitled to a Chevron
deference.
The PTO argued and agreed with Aristocrat. The
PTO argued that Congress created this unavoidable
and unintentional fees statute § 41 before the statutes
that singularly reference the unavoidable standard. This,
according to the PTO, gave credence to an implicit
basis for unintentional revival. The PTO also argued
that each time that it applied § 41 narrowly, Congress
amended the statute to correct it. When the PTO
finally applied both the unintentional and unavoidable
standards to § 111, the PTO argued that Congress ratified the PTO’s policy by amending § 111 to include
both standards.
To comply with its authority, the PTO argued that
the revival standard is a procedural rule, even if the rule
has substantive aspects. Judge Bryson asked whether,
if the statute is ambiguous and the PTO has legislative authority, the court defer to the PTO. The PTO
argued that it had legislative rule-making authority for
procedural matters such as this one, but explicitly and
repeatedly declined to take a position on whether it is
entitled to Chevron deference.
As in its brief, IGT stressed that the statute’s plain
language requires the PTO to apply the unavoidable
standard under §§ 133 and 371. Even if § 41 authorizes the PTO to apply the unintentional standard, IGT
argued that the court should defer to the more specific
provisions of § 371. IGT also argued that the PTO is
not entitled to Chevron deference in this case because
any such PTO procedure for revival is contrary to the
statute that cites unavoidable as the means for revival.
IGT also argued claims that even though companies
have relied on unintentional revivals, no unfairness
results from applying these laws made by Congress
because those patent holders have arguably already
enjoyed their exclusive but allegedly improper patent
rights.
Conclusion
The Federal Circuit’s decision could have important
ramifications for many patent holders. Although the
PTO has not changed its policy on reviving unintentionally abandoned applications, companies should
timely file all appropriate fees to ensure courts will not
invalidate their patents. Companies may also want to
contact their counsel to identify and assess any potential
weaknesses in their own and their competitors’ patent
holdings.
Intellectual Property & Technology Law Journal 3
Notes
1. Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., 491
F. Supp. 2d 916 (N.D. Cal. 2007).
2. GlaxoSmithKline v. Dudas, 541 F. Supp. 2d 805 (E.D. Va.
2008) (district court enjoined the new PTO rules because it
found that the rules were substantive and therefore exceeded
the PTO’s authority).
Reprinted from Intellectual Property & Technology Law Journal September 2008,Volume 20, Number 9, pages 15-17,
with permission from Aspen Publishers, Inc., Wolters Kluwer Law & Business, New York, NY,
1-800-638-8437, www.aspenpublishers.com
4 Intellectual Property & Technology Law Journal
Volume 20 • Number 9 • September 2008